Siemens Gamesa is to close its Aoiz factory at Navarre in Spain with the loss of up to 239 jobs, in response to what the company called “challenging market conditions” in the wind energy industry.
The manufacturer said the facility is “not competitive in the market environment to produce blades for large turbine models”, with strong competition and price pressures having led to a deterioration of margins.
“To succeed in that environment and increase the competitiveness of its onshore business, the company will focus on the next generation of large turbines, with rotors of up to 170 metres,” it said.
Siemens Gamesa added that these models already represent almost half of the current demand and are “crucial to increase its profitability and bring further down the cost of clean energy”.
It said that the plant in Spain makes the SG 3.4-132 primarily for local projects, but higher costs and geographical position, more than 200km away from the closest port, make it uncompetitive for global markets.
Siemens Gamesa said it will start a collective dismissal procedure for a maximum of 239 employees.
Negotiations with local workers council are intended to start in the coming days, in accordance with applicable rules and regulations.
Information on the final agreements will be communicated once negotiations are completed, the company said.
Siemens Gamesa onshore chief executive Alfonso Faubel said: “We are making a difficult decision and I am fully aware of the impact it will have in some of our employees as well as the local community. We will do our best to support our colleagues through this transition.
“We do not take decisions with such a grave impact lightly and over the past months we have examined carefully every option at our disposal and have reluctantly concluded there is no alternative to this action.
“In the current circumstances, we have the obligation of adopting the measures needed to secure the long-term sustainability of this company and the jobs of more than 24,000 colleagues around the world, including close to 5000 in Spain.”
Siemens Gamesa said the closure decision is not directly linked to the Covid-19 crisis, but the effects of the pandemic on the company’s operations and commercial activity have “accentuated the need for action”.
The company said it still has strong roots in Navarre where Siemens Gamesa has a global engineering hub for the development and validation of onshore wind technologies.
It will also install and test the prototype of its Siemens Gamesa 5.X latest generation turbine in Alaiz at Navarre, where it has run validation campaigns for all its onshore turbines.
The nacelle will be assembled in Siemens Gamesa plant at Agreda in Soria, Spain, with other components, such as the gearbox and the generator, sourced from some of its other plants in Spain.
Faubel said: “Spain will still be the country with the largest manufacturing footprint for us.
“Additionally, we are reinforcing our R&D related activities, less exposed to market temporary conditions, and in the last two years we hired over 450 employees in Navarre and the Basque Country.
“Finally, the proximity of the Spanish suppliers to our onshore R&D hub represents a big opportunity for them. In 2019 we bought more than €1.2bn euros to Spanish suppliers.”